[Incheon Fraud Defense Case] An Incheon Fraud Attorney Successfully Defended a Client Charged With Fraud, Resulting in a Suspended Sentence

The account the client gave to the Incheon fraud attorney, stating that the fraud charge was unfair, was as follows.

The client was the representative of a company that develops and manufactures chemical products and had entered into a technology development agreement with a seller of building management supplies, along with a request to develop a stain remover.

A short time later, however, the client received a criminal complaint from that seller.

The complaint alleged that the client had deceived the seller by using the development funds sent by the seller to ‘purchase raw materials unrelated to the development of the stain remover product’ and to ‘repay personal debts.’

It was true that the client had diverted the funds because of the company's circumstances at the time and rising costs, but the client had no intention of failing to carry out the product development, so the client requested the assistance of the Incheon fraud attorney to address the unfairness of being accused of misappropriating money and to seek a reduction of the sentence.

What Is Fraud?

Fraud refers to any crime in which a person deceives another, exploits the other party's mistaken intent, and thereby obtains the delivery of property or acquires another pecuniary benefit. It is a representative property crime and, in everyday life, mainly appears in the form of voice phishing, insurance fraud, and similar conduct.

▣ Criminal Act, Article 347 (Fraud)

1) A person who deceives another and thereby obtains the delivery of property or acquires a pecuniary benefit shall be punished by imprisonment for up to 10 years or a fine of up to 20 million won.

2) The same punishment as in the preceding paragraph shall apply where, by the means described above, a third party is caused to receive the delivery of property or to acquire a pecuniary benefit.

※ The punishment for fraud varies according to the degree of deception and the extent of the property damage, and where the amount of damage reaches 500 million won or more, the conduct is subject not to fraud but to aggravated punishment under the 'Act on Aggravated Punishment of Specific Economic Crimes'.

※ Elements of Fraud (the Conduct)

For fraud to be established, all three elements of ‘deception,’ ‘delivery (an act of disposition),’ and ‘mistake’ must be satisfied.

The victim claimed that the client had received the advance order payment by saying, “If you pay the advance order payment, the stain remover product can be produced more quickly,” but that the client had instead used the money for raw materials needed to produce a different product and to repay personal debts.

▶ Daeryun rebutted this and argued that the client had never said that funds were needed ‘for the production of the stain remover product,’ and that this was a one-sided claim by the victim. Daeryun argued that the client was continuing to develop the stain remover product and that only the final testing remained.

The victim claimed that the client had received the investment by saying, “After moving into the research site and constructing a new production plant, I will set up a space where the requested stain remover product can be produced,” but that the client in fact had neither the intention nor the ability to do so.

▶ Daeryun rebutted this and argued that the client had actually received approval to move in, but had given up the relocation plan because of the circumstances of the company that was to move in together. In other words, Daeryun argued that the client had no intention of deceiving the victim to misappropriate money.

Daeryun asked the court to take into account that the issue arose from the economic difficulties the client experienced as the company grew in size and from problems caused by the inability to raise company funds smoothly due to environmental changes such as rising costs and the COVID-19 situation.